San Diego doesn’t need divisive wage referendum

Nobody who works hard at a full- or part-time job should live in poverty. Nobody who works hard should have to choose between being a good employee and his or her health, the health of his or her family or the health of their fellow workers. We know most San Diegans believe this. As local businessmen who have been part of San Diego for over 40 years, we believe most local business owners believe this, too. That is why we urge an end to plans being made by some members of our business community to try to block enactment of the city of San Diego’s minimum wage and earned sick leave ordinance through an expensive and divisive referendum.

The minimum wage and earned sick leave ordinance passed by a supermajority of the City Council establishes a basic standard of fairness for working people and their families. Our business experience here in San Diego tells us it makes good economic and business sense, too.

The high cost of living in San Diego is well-documented. Full-time work at the California minimum wage of $9 an hour pays $1,560 a month before taxes. In a city where the average one-bedroom apartment rents for $1,032, it’s unrealistic to support one’s self or a family on that wage. Our city minimum wage and earned sick leave ordinance gives an estimated 172,000 San Diegans a modest and gradual raise to $11.50 an hour by the year 2017 plus the ability to earn up to five sick days off per year.

Also well-documented is that increases in salaries of low-wage workers are spent close to home by these workers on basic necessities like food, housing and transportation. In San Diego, that means millions of dollars more circulating and recirculating through the San Diego economy each year and the associated multiplier effect of that spending. Earned sick days means millions more in improved productivity courtesy of a healthier and happier workforce.

What is less well-documented is the effect of city minimum wage and earned sick leave measures on local businesses in high-cost of living communities. But the data are starting to roll in. In San Jose, a year after that city created a higher local minimum wage, business boomed, according to an analysis compiled by NBC News. Sales at registered businesses were up 3 percent from 2012 to 2013, and 19 percent in the retail sector, including restaurants.

Overall, business registration figures point to a surge in new business activity. The unemployment rate declined, according to the California Employment Development Department. In the restaurant and hotel industry, the sector with the most minimum wage workers, 4,000 jobs were added in the year after the city’s local measure passed.

Researchers also are looking at the positive effects of earned sick leave policies. Such laws are in place in Connecticut and many cities, including San Francisco, Seattle, and Washington, D.C. In April, New York City started requiring businesses with more than 15 employees to provide earned sick leave to workers and Massachusetts recently placed a measure on the November ballot asking voters to require earned sick leave statewide.

Earned sick leave policies predominantly help minimum-wage workers in the service and retail sectors. Nearly 40 million Americans — almost 40 percent of the private-sector workforce — don’t have earned sick leave, according to a new Economic Policy Institute study. The vast majority of these workers are at the bottom of the pay scale, according to the Department of Labor.

A new independent study in Massachusetts recently confirmed what we both believe: the benefits of earned sick time greatly outweigh the costs. The report by the Institute for Women’s Policy Research finds a net benefit of $74 million annually in Massachusetts with substantial advantages for employees, employers and public health. Businesses that provide earned sick time will drastically reduce employee turnover and increase productivity, among other benefits. IWPR calculates an annual net value of $26 million for employers in that state.

The local minimum wage and earned sick leave ordinance that a supermajority of our City Council passed will help hard-working San Diegans. It will benefit the San Diego economy, and be good for local businesses. We urge our local business community, let’s not delay, let’s not divide, and let’s not throw good money after bad. Please drop the referendum threat.

Jacobs, founding chairman and CEO emeritus for Qualcomm, has been a business leader in San Diego since 1969. Katz, executive officer and co-owner of Manpower San Diego, has been a business leader in San Diego since 1977.